Question - Entries for Available-for-Sale and Trading Securities the following information is available for Kinney Company at December 31, 2010, regarding its investments.
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Securities
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Cost
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Fair Value
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3,000 shares of Petty Corporation Common Stock
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$40,000
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$46,000
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1,000 shares of Dowe Incorporated Preferred Stock
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25,000
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$22,000
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|
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$65,000
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$68,000
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Required -
(a) Prepare the adjusting entry (if any) for 2010, assuming the securities are classified as trading.
(b) Prepare the adjusting entry (if any) for 2010, assuming the securities are classified as available for-sale.
(c) Discuss how the amounts reported in the financial statements are affected by the entries in (a) and (b).